Humans have bartered with each other for thousands of years, so it's not surprising that almost 70 percent of U.S. service employees trade or give away goods and services, which costs companies billions of dollars a year, according to a new study out of Michigan State University (MSU).

Clay Voorhees, study co-author and a MSU assistant professor of marketing, says one of the best ways to combat this illegal practice (called “sweethearting”) is through better job candidate screening.

“Our results show that by adding a few screening questions that focus on the potential employee’s risk-taking, ethics and need for social acceptance, employers could identify ‘bad apples’ up front and simply avoid hiring them,” Voorhees said. “In the long run, this approach would address the issue.”

In the short term, Voorhees says, education and training are needed about the ramifications of sweethearting and how it damages a firm. 

“Simply reminding individuals of their ethical obligations can greatly reduce deviant behavior,” he said.

The study, which will appear in an upcoming issue of the Journal of Marketing, is the first to look at sweethearting specifically. Voorhees co-authored the study with Michael Brady and Michael Brusco of Florida State University.

Employee theft costs U.S. firms about $200 billion a year—40 percent of which stems from sweethearting, according to previous research.

Voorhees and colleagues surveyed nearly 800 service employees and customers in restaurants, hotels, car washes, cable television installation and repair companies, tanning salons and other retailers and service providers.

Some 67 percent of respondents said they had participated in sweethearting in the past two months. Many employees surveyed said they were motivated by the prospect of receiving better tips and similar sweetheart deals at the customer’s place of business (“tit-for-tat”).

“I was surprised by how pervasive this behavior was across a wide range of service industries,” Voorhees said. “I fully expected to see this behavior in bars and restaurants, but I was surprised at how prevalent it was in industries like retail, sports and recreation, and even with insurance claims.”

So, meeting industry professionals, is sweethearting a rampant issue? Do you consider it bad? Do you practice it yourself? Please let us know in the comments.

(Story materials provided by Michigan State University.)